Climate Change and Energy Procurement: A Utility Perspective

1
Climate Change and Energy Procurement A Utility
Perspective

• Colorado Rural Electric Association Annual
  Meeting
• February 8, 2008

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PGE Supports Greenhouse Gas Reductions

• Charter member of the United States Climate
  Action Partnership.
• Member of the Clean Energys Group Clean Air
  Policy Initiative.
• PGE was the first investor-owned utility to
  support enactment of AB32.
• Our customers have invested and continue to
  invest in customer energy efficiency programs and
  a clean electric generating portfolio.
• Our electric sector GHG emissions are among the
  lowest of any utility in the nation.
• PGEs carbon emissions are already low, about
  60 below the average U.S. utility.

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PGE Supports Greenhouse Gas Reductions, contd
PGE has a number of programs underway which will
further reduce our carbon footprint

• Resource additions will follow the States Energy
  Action Plan Loading Order.
• PGEs ClimateSmart Program allows customers to
  make their energy use "climate neutral.
• PGEs Advanced Metering Infrastructure (AMI)
  rollout supports advances in energy efficiency
  and demand response.
• The Emerging Renewable Resource Program (ERRP)
  helps move emerging renewable resources toward
  commercial viability.
• Plug-in Hybrid Electric Vehicles will have
  greater fuel efficiency than todays hybrids.

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PGEs 2006 Energy Resource Mix

• PGE Portfolio
• 2006 Intensity 450 lbs/MWh
• Coal lt 2 (QFs)

20
30
20
15
15
Note Percentages can vary significantly,
depending upon annual weather patterns.
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PGEs Long-Term Procurement Process
Going forward, PGEs procurement process follows
the Energy Action Plan Loading Order, and
provides increased reliability and higher levels
of preferred resources.

• Energy Efficiency meet the energy efficiency
  quantity targets adopted by the CPUC.
• Demand Response meet the demand response goals
  as modified by the CPUC.
• Renewable Resources achieve mandated RPS goals.
• Distributed Generation implement the California
  Solar Initiative.
• Residual Need new dispatchable and
  operationally flexible resources.

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Electric Procurement Accomplishments to Date
Since resuming procurement in January 2003, PGE
has worked to restore system reliability and
implement the states policy goals

• Energy Efficiency over 700 MW installed energy
  efficiency projects.
• Demand Reduction about 650 MW of dependable
  programs.
• Renewables over 2,000 MW under contract.
• Since 2001, over 20,000 PGE customers have
  installed solar generation at their homes or
  businesses. This equates to almost 170 MW
  installed.
• Residual Need 2,800 MW of efficient gas-fired
  generation on-line by 2010.

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PGEs Key Climate Policy Principles
Any climate program must be economically
sustainable and achieve the environmental objects
of the regulation.

• Mandatory emissions reductions are necessary.
• Market-based programs minimize costs and maximize
  innovation.
• Broad-based participation leads to more
  cost-effective results.
• Energy efficiency must be a top priority.
• Investment in low and zero-emission generation
  and technologies is critical.
• Early action deserves to be rewarded not
  penalized.

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Compliance Options for Achieving Objectives

• Non-Market based (command and control)
• Portfolio Standard Each entity must keep CO2
  emissions rate below a target.
• Programmatic e.g. RPS, CEE targets set to
  achieve reduction goals
• Market based
• Cap and Trade Overall cap on emissions with
  trading of allowances.
• Greenhouse Gas Tax

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Vehicles for Achieving Objectives

• Federal various bills under consideration
• e.g. Lieberman-Warner Climate Security Act of
  2007
• Regional - Western Climate Initiative
• State - Assembly Bill 32 The California Global
  Warming Solutions Act of 2006
• California to reduce GHG Emissions to 1990 levels
  by 2020, approximately a 25 reduction from 2006
  levels.

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Compliance Responsibility and Cost Impacts
Electric

• Point of Regulation Alternatives
• fuel supplier
• power plant
• load serving entity

Compliance costs will flow through to the end-use
customer.
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Compliance Responsibility and Cost Impacts Gas

• Point of Regulation Alternatives
• fuel supplier
• pipeline
• utility

Compliance costs will flow through to the end-use
customer.
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Questions